The Coffee Machine that can Pay for a University Education

Now that readers are starting to fantasize about getting a little bit of this early retirement action for themselves, Mr. Money Mustache is getting many questions about the typical expenses people imagine in their future. One of these is “How will I pay for the University* education of my children”?

I must admit, even as the Dad of a 5-year-old, I don’t do much thinking about how I’ll pay for his education. And I don’t think you need to worry too much either. Why? Because once you grow your Money Mustache a bit, this will seem like a tiny amount of money to you. And as with every other expense in your life, it is in YOUR CONTROL.

How much does a College education cost? Some people get big spirals of fear in their eyes and cry out “Two hundred thousand dollars!!!” Yeah, in the worst case if you pack your kid off to the most prestigious and expensive private university in the country, he never gets a job or scholarship and no financial aid, and you pay for all his rent, clothes, beer, tuition, and books, it is possible to spend this much or more on an education.

But I just looked up some real numbers for my local University of Colorado at Boulder, apparently a pretty fine institution.

University of Colorado at Boulder – ANNUAL COSTS

City:

Boulder

State:

CO

In-district tuition:

N/A

In-state (out-of-district) tuition:

$6,446

Out-of-state tuition:

$26,700

Fees:

$1,486

Room and board:

$10,378

Hmm.. What I see is $7932 per year for tuition and fees. If your kid is like I was, and is willing to pay for his own education with no loans, and live at home with the parents for free rent and food to achieve this, he can accomplish this with only 528 hours of paid work (3 months at 15 bucks an hour) per year. In other words, working during the summer as a landscaper or painter already pays for your whole education, debt-free.

That’s the minimum-cost scenario. Now let’s take the maximum cost: out-of-state tuition PLUS room and board. $148,000 for four years.

Let’s say you have a baby right now. You’d like to pay her way in full to Colorado University even though you live in another state. And you don’t want her to ever have to work, or get any scholarships between now and graduation at her 21st birthday. No, you don’t think this will make her grow up to be a spoiled brat with no work ethic, because look, she’s just a cute little baby right now!

You currently work and you and your spouse both like the local Starbucks a bit too much. In fact, you each stop in at the drive-through every day for a coffee and small treat on the way to work. You also stop in on the weekends too. In total, you average $7 each per day** for fancy coffees and the occasional lunch here and there.

You can probably guess how this adds up. This habit, compounded at 7%, adds up to about $148,000 over the 17.5 years from your baby’s birth until she starts university***.

So, just switching to brewing good coffee at home, which I just calculated costs about 10-15 cents per cup if you buy your Organic Fair Trade Espresso roast in 2.5lb bags from your local Costco, will pay for pretty much the whole worst-case education.

And as an MMM reader, you will NOT be incurring a worst-case education cost. Your kid will be a school whiz because you will have time to be home and read with her. She’ll earn money throughout high school, perhaps even doing some advanced assistant work for your own part-time consulting career. And she’ll probably have a Money Mustache of her own going on by age 17, so she will find ways to spend less than the maximum possible amount on her own education. She’ll graduate debt-free and be financially independent before she even has kids of her own at age 30. A permanent repeating family dynasty of happiness and wealth will be born.

At this point, you’ll invite Mr. Money Mustache out for a decadent sushi meal to thank him for changing your lives.

* I’m always torn as to whether to call it “University” as we did in Canada and the rest of the world, or “College” as it tends to be called in the US. I’ll say “College” in this article just since most of the readers are in the US right now and thus it will show up in the search engines more readily.

** I admit that having two people each wasting 7 bucks a day is a bit extreme for me to imagine. But to pay for the in-state tuition equivalent, and still the full ridiculous room-and-board, it’s less than $3.50 a day.

*** Let’s assume that the 7% return is the after-inflation number, as described in “Dude, where’s my 7% investment return“. This accounts for the fact that university tuition will rise with inflation as well… unless we eventually start taking education seriously as a country and bring the cost back down as other advanced countries do.

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Nice post Mr. Money Mustache! What I have done, here in Canada, is take the cheques that the Canadian Government sends me each month, presumably as a reward for procreating. They send a cheque and I view it as “found money” and put it into an RESP. It works out to about $150 a month, but can be more or less depending on what you make. The government then gives me another 20% of each amount I put in! Plus I earn my return, compounded annually and all that. I figure this way, the Government pays for his whole University Education. If it isn’t enough, he may have to get a job. So there.

Very nice plan! In fact, it might even be TOO generous if you do the math: if it compounds at 7% after inflation, you put in $150/month and the government boosts by 20%, you’ll end up with about $70,000 by the time your youngster is 17. That is a hell of an educational gift!

It is always nice to have a surplus, but if you ever feel strapped for investable money in your own life, you do even have the option of using $50-$100 of those monthly dollars for something else – paying down other debts or investing more for earlier retirement or a more relaxed work schedule during the early childhood years. After all, would your kid rather have way too much money during University, or a bit more time with his parents when learning to read? It is an interesting tradeoff.

The thing about RESP is that the governement top up 20% of what you contribute (up to $2500/year).

So that’s $500 of free money per year per kid.

Now here’s the catch: if you kid doesn’t go to school, you only get your money back that you put in, and you lose the bonus and the interest earned on it.

But every catch has its loophole:
1- the money can remain under your ownership
2- if you bundle all your kids into a familly plan, one kid could get 100% and the other(s) 0%
3- if you stick to the basic RESP program, you can withdraw 100% of the money upon presentation of a single proof of full time study from one of your kids.

Hmm… I don’t have your Ninja math skills, but I didn’t realize it would be that much! Hooray! We don’t really have any other debts (except for our Mortgage) and an undergraduate degree ain’t what it once was. youngster may need to do post-graduate work. So, for now, I’ll stick with it. PS. How did you know how long until my youngster is 17? ; )

Sounds great! You can never go wrong with too much saving, as long as you aren’t compromising your parenting to achieve it.

I think an undergraduate degree is MORE than it used to be. In many fields like my own Engineering one, the meritocratic nature of the Internet and the breaking down of old Suit-and-Tie-and-Pedigree culture is making the degree more of an optional thing. Partly because society and the work world is now changing faster than the educational institutions can keep up.

In Engineering for certain, as well as business, art, music, writing, and who knows what else you can make it to the top without a degree, and having a postgraduate degree is in some case even looked upon as dorky and impractical – even a negative when deciding if a candidate will be an actual achiever in the real world!

I still recommend university educations for everyone who can afford them, but I do like to speak out against the overly expensive assumptions that some people are making. University gets you nice background education, but it is people skills that get you jobs!

Some degrees can only be obtained by attending a four year college. Where I totally agree with you on that people skills are the thing that really get you the job, there are jobs which require a certain amount of knowledge and skill set. Mainly they fall under the science category, but that is a huge category with many different kinds of jobs. For example, I want to become a Dietitian. I need a Bachelor’s of Science in that field and then I have to become certified. I have to study and learn about certain things in Science, I cannot simply BS my way through that career and certification process. I need to actually know what I’m doing and talking about when advising people on their diets. Eating right is complex. It really is a science. There are chemical balances which need to be reached in order to have a superb diet.

My strategy for college savings has been to use the $1,000 child tax credit provided by Uncle Sam. We have 2 kids, and thus get $2,000 each year. After we get our refund, I simply take each kid’s $1k and put it into an UTMA account. I figure by the time they get to college we’ll have roughly $18k for them to use.

From there, I plan on using the strategy my parents did. My sophomore year of high school they told me they had money saved for college, but if I was able to get scholarships to offset my tuition, any leftover money would be mine to keep. It worked well, I made sure to keep my grades up in high school and got a high ACT score that netted me $2,000 scholarship per year.

I must cry foul, you consistently oversimplify in your posts, often by a great margin. This is one of the worst…

Lets say a University education CURRENTLY costs $148k.
You start saving for it now by cutting down on coffee and with a compound interest rate of 7% over 14i’sh years you end up at $148k
Does the University education still cost $148k or is it not subject to the same inflationary factors that gave you your 7% return?
At the same rate it would have risen to $380k (rough calculation), even at half the rate, ie you are achieving double inflation on your savings it is $240k (rough calculation), you are still $90k short.

Thanks for the fact-checking. I always enjoy a little constructive criticism. And you don’t have to cry – the investment gains listed in that article, as with all other articles, were already adjusted for inflation. I added a footnote to that effect, just for you.

If you think Mr. Money Mustache’s articles are consistently too simple, you might have to write some more complicated ones on your own blog. I’m writing these things for two reasons: because it’s fun to write them, and because this shit works. The point is teaching you to waste less money, and to illustrate the benefits you get from that in the surprisingly near future. It really is very simple for a moderate-to-upper income person to become rich enough to retire very young, so this blog about it has to be simple too!

Actually, as research shows, university/college tuition rates rise past inflation rates. So even these calculations would turn out to be incorrect, and vastly underestimate anyone’s financial needs for school in the next 5, 10, 20 years.

What I’m hoping is that this country will start to value education for its citizens and see the benefit of not only subsidizing education more than ever, but also accredit online public schools. Making it virtually affordable for anyone.

Here in Sweden we also get some money from the government to have kids right now it is about 150$ per kid wih a little (about 10%) added if you have more kids. This is the same for all and is not income adjusted as it (in theory) is money for the kid which does not have any income. We put this money into a fund for our kids (now 1 and 3 years old).

This will add up to a fair amount when they turn 18…but I am already thinking about how we can best ‘give’ this money to the kids helping them to get a good start in life but at the same time helping them grow their money mustaches. Any ideas??

I’m sure you will come up with great ideas yourself. My own strategy for my little son is to teach him that money is not an infinite resource, and neither is the Earth.. so each time he wants to buy something (or have something bought for him), he must weigh it against all other possible uses for that money. Having kids feel like they are choosing and purchasing their own toys, rather than just getting them free all the time, helps them appreciate how long it takes to earn something, meaning decisions are made more carefully. If you carry that mentality up through adulthood, you end up free from financial troubles for life.

I like this a lot. I just hope that universities don’t keep having the exponential increases in tuition that they have the past 10 years or so. A recent graduate from my program (2004) informed me that he was paid only 25% of my current tuition (as of 2011) for the same program.
Also, I’m of the belief not everyone needs (or even wants) a college education. But that’s a whole other topic I believe.

I just calculated the cost of my coffee habit since buying a Nespresso espresso maker and milk heating/frothing device a year and a half ago. At this point in time my coffee costs about $2 per cup (compared to my $5.50 grande soy latte from Starbucks, which I still occasionally indulge in). The coffee pods cost about 0.68 cents each, and they’re aluminum so I can recycle them and compost the used grounds (this requires a bit of work but is worth it – anyone who puts aluminum in the garbage needs a kick in the teeth). The machines were nearly $400 combined. Using a conservative estimate, I have already saved about a thousand bucks by making my own lattes at home, so they have more than paid for themselves. (I tried to factor in that I am most certainly drinking more coffee now than when I had to go to Starbucks for it). It is more than worth it to have a machine that pulls a perfect shot of espresso with little time or effort. Also, it’s healthier – no sugary latte syrups. Vanilla soy milk + a good sprinkle of pumpkin pie spices from the bulk food store = yum!

I realize that I am lagging about 8 months behind here but I had to make sure that others who come across Katies comment are told that Nespresso pods (any coffee pods) are NOT recyclable. Rather than typing out all of the greenwashing of Nespresso I’ll just leave this link.

Making coffee at home is the most efficient way to increase your ‘stash but pod machines are very expensive and require massive amounts of mining to produce the minerals required for the machines and pods. A simple 1 cup pourover can be purchased for $5.

In the comments in the article you linked to, someone said they had called the big waste management company in North America and confirmed that they do recycle the pods. That company does waste management where I live so I know my pods are being recycled.

I’m so glad you posted the link though; I bought one of those “outpresso” devices that makes the recycling so much easier. Until now I had been opening each capsule with a paring knife, talk about tedious.

Anyway…I’m not going to perish in eco-guilt for using my Nespresso. In addition to the ability to quickly and easily make a perfect shot of espresso, I chose that machine because I can recycle the pods and compost the grounds, and because the machine has energy saving features. I don’t drink drip-coffee, so that single-cup brewing thing you linked to is not gonna do the job. I would bet that my machine uses less energy than brewing espresso traditionally would, because I would have to turn on my stove for that. Just like an electric kettle is more efficient than a stovetop kettle.

Either way, “earthcrisis” has not been averted because coffee is not an eco-friendly thing to consume, period. But if we wanted to have zero impact on the earth, we would have to hang ourselves with fair trade hemp rope and have our bodies eaten by endangered wolves.

I figure I’m balancing out my coffee habit by buying green electricity from my hydro provider, and by never having owned a microwave, TV, or car. I’m not going to feel bad for not being perfect.

And while I do not have kids (so no need to save for their education) this post did prompt me to actually calculate how much it’s costing me to make my daily french press coffee at home.

Conclusion: I must tag along next time my Mom goes to Costco and get my organic coffee there. Even buying my one-pound coffee on sale at my local Save-On Foods, it costs me almost 70 cents a cup with cream & sugar! Well, it’s still better than my occasional Starbucks Americano (which is getting less and less enjoyable the more I read of MMM).

Last year I got our coffee at home price down to $.17 per 6 ounce cup. That’s with cream and sugar. Hubby uses a boatload of sugar. We buy Archer Farms decaf at Target for about $8.50lb and the donut shop blend from Aldi at $6lb. These are the cheapest options that we’ve found that taste great. We use a french press. When the coffee is gone, I pour another 1/3 pot of hot water onto the grounds and get some “free” decaf.
I think I’ve had a fancy coffee out 3X in my entire life and that was for roadtrip caffeine purposes. I just can’t see what’s so special about overly sweetened hot bean water that makes it worth $5.

sound analysis here, Mr. MM and let me back it up with our actual numbers as we are in the middle of the process.

Of all the schools that accepted her, our daughter’s choice came down to New York University (55k per year, 220k total) and The University of Rhode Island (37k per year, 148 total).

Said daughter is a school whiz, as you put it, and URI offered her 12k per year.
NYU, being NYU, offered zip.

She is in her second year at URI and loves it. She is a double major in Poly Sci & French. Great opportunities abound. She’ll be spending her junior year studying in France. She’ll come back having most of her Poly Sci credits done and having done them in French.

She has had to turn down an offer from The American University in DC for lack of time and is already in discussion with the US State Department, The UN and The EU regarding internships post France.

So clearly choosing the state school hasn’t limited her options. Meanwhile we are saving 35k per year.

After her scholarships, 25k is the annual out of pocket. 100k total, half what I had planned on.

Wow, cost of living may be high in Ontario but here we clearly have you beat! I paid $5500 per year for my tuition and fees at Trent University. Except I didn’t actually pay that much because I got a scholarship for almost the full amount, which at the time was offered to 2 new students per year and I had to write essays and do interviews to get, but now Trent offers free tuition to any student with a 90% average graduating high school. Of course, people still complain about the cost of tuition around here, and in Quebec, they recently had major student protests about it, even though their tuition is even lower than ours in Ontario.

What do you think of parents purchasing a house with a basement apartment for the child to use when they go to University? I was thinking this gives them a certain independence while still saving by living at home.

I believe colleges only do undergraduate while universities offer undergraduate and graduate degrees. I think you just meant that Americans and Canadians use different terms when they want to refer generically to any institution of higher learning, but I still thought I would mention the difference between the words because having a good vocabulary is both frugal and fun!

In Canada a college refers to a diploma- or certificate-granting institution, where you could get, for example, a Ceramics or Educational Assistant diploma, but not a Bachelor of Education, and university refers to a degree-granting institution, undergraduate or otherwise, where you get B.somethings, M.somethings, and Ph.Ds.

Least expensive way to fund your child’s education? Work for the insitution. I changed jobs, and a side benefit is that my daughter has her basic tuition fully covered. An added benefit is that it is taxable in her hands, not mine. This applies to everyone employed by the University, you don’t have to be faculty. We had already put all the baby bonus money in a mutual fund, so there will now be money left over when she graduates.

I just found your website today and have been reading from the beginning (I realize this is a VERY old post but I assume you’ll still see the response)

It is NOT unreasonable to see couples spending $7 a day at Starbucks, in fact it’s expected that many single people will spend that or more DAILY! It’s incredible (I worked at the bucks for 6 months and have since then moved down the street to an independent coffee shop)

Im not kidding you, we had a regular guy named Stan who was VERY wealthy, come in 2-3 times a DAY and get a modified drink order for himself, his wife and sometimes grand kid along with a pastry. That’s $10-$15 per VISIT with multiple visits a day. The guy paid the “salary” of at least two workers.

Obviously this was our most extreme case but coffee shop “regulars” are a common breed even at my current shop. As a coffee enthusiast at 21 years old, I’m going to have to seriously rethink my approach when i get a new job and can no longer support my habit.

I’m sure someone has pointed this out to you before, but roasting your own coffee is a definitely win financially, *and* flavor wise.

Sweet marias (www.sweetmarias.com) is a pricey site for green coffee, but even there the prices are mostly less than $7/lb. Most Brazils go for a little over $5/lb, and while you *can* purchase some insanely expensive coffees, for the most part it’s all reasonable.

Furthermore, you can be certain that the people who worked to produce the coffee have been fairly paid, even more so than with Fair Trade certified beans. The person in charge of the site has relationships with many of the farmers.

Further-furthermore, if you *don’t* buy from sweet marias you can get coffee even cheaper (although I don’t know how they source their beans). Overall it’s a win.

The initial investment: probably zero. Do you have a hot air popcorn popper? How about a cast iron pan? Heat gun for paint? (Buy a dog bowl).

The skills needed? Do you have *any* of the following:

1. A sense of smell?
2. A sense of sight?
3. A sense of hearing?

I know a blind guy who does it. And while I don’t know a deaf person who roasts, I’m know they can by smell and sight. Finally, if you’ve sadly lost both hearing and sight, I’m sure your sense of smell could steer you right.

I was just going to say the same – we home roast and pay about $6-7 per pound and love it! Sweet Maria’s is the best source and what you will find is that it’s a very zen (and mustachian) way to enjoy coffee. It slows down the process and gives you time to appreciate it much more. Plus, it tastes fantastic!

My husband and I don’t agree on the whole paying for college thing. He had his paid for completely and was able to go to whatever school he wanted. I always say that I was allowed to choose anywhere I wanted to go as well – I just had to get a scholarship to wherever that was. (And I did.)
So now that we have two wee ones of our own, college funds came up. He would like to be able to provide them the same opportunity he had, whereas I feel that if they have to pay for at least some of it they will have better ownership of their education.
His argument is that we will have too much money for them to qualify for financial aid – and while merit based aid is available – it is a rarity.
Any opinions on this?

If he wants your kids to attend a prestigious private college then he is correct. Most do not offer any kind of merit based scholarships. And if you are living a Mustachian lifestyle and saving up hundreds of thousands of dollars then you will not qualify for need based financial aid either. If you have money in the bank the colleges want it in their bank and they will not give you any kind of discount off the full sticker price. My parents didn’t even have any savings outside of their 401k but we were still expected to pay 25k a year based on their 100k annual income.

I buy black tea for 1 dollar per 100 bags. Lasts me a month. Taste better than coffee and is high in fluoride. Annual cost 12 dollars . Your Starbuckers are spending about 3000 per year or 300 time
s our spending on caffiene!

So I graduated from CU Boulder in 2011 and the annual tuition for a Business degree was about $16000- the information you linked in your post looks to be per semester, not annual. Your choice in coffee is superb though:)

I love your blog, by the way! My best friend just got me on it as a way to help me with getting out of debt.

In terms of coffee, I rarely go to Starbucks. However, I found that I have saved an ENORMOUS amount of money AND waste at home with my Keurig. I know that sounds impossible, but I’ll explain.

My boyfriend, Scott, and I found that when we had a regular coffee maker we were going through coffee extremely quickly because no matter whether we brewed a full pot or a half pot, we still had loads of coffee left over to go bitter and stale and then poured down the drain by the next day. Scott begged me for a Keurig, but I was hesitant at first. The machines are expensive. Those k-cups can run between $10 and $30 per box, with about 24 cups in each. Each one is made of plastic and aluminum. Half of the grounds don’t even get used during the brewing process.

So, we went to Bed Bath and Beyond with a coupon and looked at the options. What I found is that I could buy whatever coffee I wanted and pack it into a reusable metal k-cup! If I get the huge 39oz tin of coffee for $7.95 (Folgers, which isn’t my favorite), that lasts me almost 3 months despite drinking coffee every day. If I had gone with just buying k-cups, that would be $10 per month so that would cost me $30 at the end of 3 months instead of just $7.95. That’s a savings of $88.20 a year!

My parents thought I was out of my mind buying a keurig. But when I only drink maybe a coffee or two a day, I save more money than they do! The $119 was a worthy investment AND I’ve reduced waste by using my own coffee. I’ve had the Keurig for two years and already made back the $119 and saved more.

Sorry, coffee always gets me on my Keurig rant! Thanks for all the tips! I’m working on my MM and getting my boyfriend to work on his too!

Whoa, you had me scared with that Keurig talk, as those things are an awful scam – IF you follow their instructions and buy the Keurig coffee at 10x the price of regular ground coffee. But if you are refilling the thing, that is totally different.

Note that there is no reason for normal coffee to go to waste either – you can brew one or two cups with a french press or by using the machine properly, or you can use a $40 Espresso machine like I do, which makes 2 cups at a time. And if you do miscalculate and end up with leftover coffee, keep it covered and in the fridge – it warms up just fine in the microwave and thus is not wasted, or serves as Iced Coffee for an afternoon shot of extra drugs.

Definitely didn’t mean to scare you! I know, it is usually the opposite in most cases with a Keurig. But I told my boyfriend that I would only buy one IF we reduced cost and waste by buying our own coffee. It has been working well so far! It especially works out when my parents do a Costco run and pick me up a the huge bag of Dunkin Donuts coffee.

I do LOVE a french press. You are very right, but the only problem I had with the french press is that he and I are extremely (like ridiculously) clumsy people. He bought me a FP for christmas and he broke it within 4 months, so we decided not to buy another.

I am so glad to hear you use the $40 espresso machine MMM. I am amazed at the whole Keurig craze and the cost and waste drives me nuts. It only takes me a minute or two to put grounds in the espresso machine, toss in some water and put the mug underneath. No waste and the coffee is much better than anything I have had from a Keurig (which to be fair isn’t bad).

This is an amazing device. No elecricity required (save for heating your water in the microwave perhaps) and best tasting brew we’ve had. Chucked the Keurig (toxic pods and microbial bacteria molding it up in the reservoir — no gracias!) Saving huge dolluhz and enjoying my coffee. Talk about win-win. Love that you can easily travel with aeropress, as it’s what, the size of a beer bottle? I’d list it in “MMM Recommends” as it’s such an elegant/frugal solution.

In Chez Willard, leftover brewed coffee gets poured into ice cube trays where they are used by my teenage daughter to create her homemade frappucino-style drinks. Recipes abound inline for copycat Starbucks recipes. I spent $2 for a milk frothing wand so I could make cappuccino at home. Pays for itself in one use, and the drink tastes better in your own mug!

There’s only one thing I find in erroneous (just slightly) in this article. While annual inflation is on average about roughly 3% (though it’s 2.2% right now, and very well could continue to be so) education experiences annual inflation rates of about ~6%. Although, you’re investment with compounding would certainly still provide a huge chunk if not all, I think it’s worth noting the rate in which higher education increases in cost. (This is a stupid growing problem. Thank goodness for Khan Academy and Treehouse.)

Of course, if something were to happen and the demand for social change occurred in such a way resulting in a deflation of college tuition…well, I’d just be super happy.

I know this is about college, and I love my coffee, but you inspired me to calculate costs.

Cost per tablet of Stay Awake caffeine pills from Walmart is 4¢. If you only want the caffeine, the pills are much cheaper even than home brew coffee. Plus, you don’t have to dump old coffee at the end of the week. This could be even more savings by eliminating the coffee maker, coffee, and additives (cream, sugar, vanilla, etc.)

An update for the 2013-2014 academic year: in-state tuition for CU-Boulder college of engineering and applied science is $13,529 per year. Most big state U’s are closer to $15K than to $10K.
Front Range Community College, on the other hand, is $5,872 for 32 credits (a normal course load for one year).
Even better, a year’s worth of college credits earned through CLEP exams will run you $640 – you can usually get most or all of your introductory and gen ed courses done this way, or by AP exams.
IMHO, (and speaking as someone who teaches at a 4-year college), paying 4-year tuition for an introductory level, 300-people-in-a -lecture-hall type course is pretty close to paying $20 for a bowl of oatmeal at a fancy restaurant. Oatmeal is great stuff, I’m not knocking it – but buy it at Costco and boil it yourself.
Save your tuition money for advanced courses at a good public university where you get resident tuition.

One caveat: CC courses (not always) set a significantly lower bar – doesn’t mean you can’t learn just as much as at a more prestigious 4-year college, but you have to motivate yourself to really learn, and work much harder than you actually need to for a decent grade so that you are ready when you make the move up to “The Show”. I say this because I often get transfer students who earned A’s and B’s at CC, then flunk out of their advanced courses at my 4-year college.

MMM: given how much money lots of people seem think they need to spend on a college degree for themselves or their kids, I’d suggest that this topic deserves another full-on, punch-in-the-face style post that you are so good at delivering. Along with housing and cars, higher education cost is one of the major impediments to stash-growing as far as I can see, and a topic where people are constantly exposed to truly ridiculous analysis and advice in the media.

Last year my son graduated with a Bachelor’s degree in Economics with a 3.5 gpa. We paid a total of $22,000 for his tuition and books for all 4 (almost 5) years combined. We also live in the Bay Area where most things are more expensive than elsewhere in the country. Many of our friends find it hard to believe that his Bachelor’s degree cost so little.

My husband and I made a deal with our children concerning university/college. We would pay for it all up to a Bachelor’s degree level if they lived at home, attended a community college for the first two years, then transferred to the local state university for their upper division. Additionally, they had to get a consistent part-time job to pay their own commute costs, other related school expenses, and fun items/outings. We also bought all textbooks used or digital to reduce costs and were sure to resell them back when classes ended. If they did not earn a passing grade in any class, then they would be responsible for all fees/tuition associated with retaking the class.

If they chose to go to another university out of the area, then we would only pay the first $20,000, and they would be responsible for the rest via scholarships, loans, job income, etc.

Fortunately, both our children saw the financial sense in graduating debt free so they both attended local colleges/universities and lived at home for free. Our daughter earned her Associates Degree then married and found a decent job that only required 2 years of college – so she has not yet continued on to the university.

Often finding a good job isn’t just about the name of the university. It seems to be a combination of luck and willingness to seek opportunities mixed with education major, degree(s) earned, gpa, university name, work/internship experience, a well written resume/portfolio, and a likable personality.

I know some people look down on state university degrees, but it has served our son well so far. He found a good job immediately upon graduation that he really enjoys. It has excellent benefits (including a pension if he stays a minimum of 10 years), offers him fascinating opportunities/experiences, has great growth potential, and pays about $60,000/year. He just recently purchased a 3 bedroom home and is only 23 years old. He is happy with his choices.

One of my children’s friends attended UC Berkeley, had a 4.0 gpa, and received two job offers before graduation with $80,000+ salaries. This friend should have little problem repaying his loans so it was a good choice for him. Another friend who went to a prestigious private university on the coast is currently trying to pay off a $100,000 loan on a $35,000 salary. A third friend had $80,000 in student loans and it took over a year for him to find a less than desirable job just to pay the bills. All 3 went to “prestigious” universities. One got the high paying dream job while the other two are struggling with their choices. So, a prestigious university doesn’t always guarantee you the best high paying job.

We earmarked $80,000 from our $700K stash for our only child’s college education. He was accepted to an expensive private college which would have cost about $50,000 per year (after deducting a $10,000 scholarship) and an in-state public university that offered him 50% off tuition and fees – which resulted in about $15,000 per year. Plus they added a really cool one-time research internship with a $4000 stipend. Happily, even putting the financial comparison aside, he really preferred the in state public university. So off he went to freshman year! Then, sophomore year he became a resident advisor which covered room and board and gave him a single room. So now his yearly cost is about $6,000. He is thriving! Total cost will be about $33,000.

Coffee:

We buy 10 oz tetropacks of Cafe Bustelo for $2.99 at a bargain supermarket catering to the Latino market. That’s $4.64 per pound. We brew one cup at a time with a full size Melitta coffee cone and “Mister Coffee” style 8-cup filters. I rinse the paper filter with boiling water, then I put three tablespoons of coffee in the filter/cone. I pour enough boiling water to moisten the coffee – looking for bubbles. Pause for a few seconds. Then very slowly pour boiling water until the coffee and water are about 2/3 up the cone. The coffee drips directly into my mug. Rich! Delicious! Bustelo is fine espresso ground. This method does not work with all purpose grinds. I have not calculated the per cup cost, but I know it’s very low!

What if you don’t currently drink coffee or have any $7/day habits? Maybe I’m just super cheap already, but I’m not seeing anything that I could cut in my lifestyle to save $7/day. (Don’t drive to work, pack my lunch, etc.) I’m sure there are still more ways to save money, but I’d like to hear your ideas.

FWIW, my husband is also of the opinion that saving for your children’s education is silly because they’ll become spoiled and won’t learn how to work hard and earn things for themselves. I disagree because college is pretty darn expensive.

I graduated from College in 2004. Total cost for me was $10.5k in tuition for my 4 year degree. I went to two years of CC at a cost of $1k a semester (5 semesters) ($5k) and then 2 years at a cheaper in-state University for $2.5k per semester ($10k). Then I got $2500 free money from the state from a tobacco settlement, and I got a $2k scholarship from my university because I was over a 3.5 GPA when I transferred. I didn’t apply for either scholarship, they just gave them to me. I also didn’t spend much on books, because I didn’t like to read books. I only got them if they were 100% necessary. I lived out of the house, but 3 of the years I had roommates living in rental houses. Total costs were $300 a month for room and board or $3600 a year. I lived one year alone and that cost more, but it was still cheaper than living in the dorms. I know this was 10 years ago, but I remember having coworkers who had gone to two years at ITT tech and had 40k in loans for a 2 year degree. It made me so sad.

No, student loans are horrible! I hear from some people that they struggle financially because they are paying off their student loans. Some of these people have become Stay at Home Moms since going to college. WHAT A WASTE OF MONEY.

It is VERY possible to go to college without incurring any debt. First off, at that age you cannot get approved for a normal credit card. You can only get approved for those ones where you have to give them x amount of money first, which is usually a few hundred. A few hundred dollars, especially if you have it to “spare” is a fortune when you are a broke college student. So, that is good. In fact, it’s excellent because it can really show a young person how to manage money the right way. If you don’t have it, don’t spend it.

Now, on to my personal story as a college student. I was homeschooled 1st-12th grade. My mother stayed home with me. I was about a year behind in starting out due to extraordinary circumstances. I was doing an accredited curriculum which was self paced. I could have graduated with a legit diploma, but I had found the work to be boring and not worth my time. (Keep in mind that there are a few different ways to teach children what they need to know academically from home. Homeschooling, unschooling, schooling from home but with a private online school, ect.)

When I was a teenager I had other homeschooling friends who were already starting to take college courses. I began to envy them. However, I had it in my mind that I had to finish highschool before I could enroll into college. I was wrong. I finally reached the age of 18. I hadn’t finished my 9th grade, let alone my 12th, so I went out to get my GED. I passed it after a little bit of studying from a GED study book. I then immediately went to enroll into my first college courses.

I applied for financial aid, was approved for the Pell Grant, and had my college completely paid for at my local community college through that. But, to improve my financial situation, I had started volunteering for the college events and New Student Orientation. This landed me a job in student government. It was on campus and the houses were flexible. As long as the campus was open and there were classes going on, I could work. I had a set amount of hours that I had to fill each week and I had to attend meetings. The job was perfect. I also had landed a job working in the school’s cafe as a cashier. The job was less flexible than my other one because the cafe was only open during the hours when the most classes took place. 8-2/3pm. These two student worker jobs paid for my lunches that I had to have at or really close to school due to my extremely busy schedule. I was a full time student working 20 hrs a week and doing a little bit of volunteer work on the weekends. My working did not affect my grades. I graduated with honors. I must admit though, that the jobs were contingent upon my financial aid. They were both workstudy jobs, so I had to be approved for it. If I had used my full loan approved amount, then I would have had to lower my loan amount, but since I opted out of receiving loans, I was able to pocket that money. Along with lunches most days, I also had the arrangement with my mom that I would pay for all of my other expenses, which was mainly gas. I even managed to pay for at least half of my own wedding with the extra income. I was living with my family who paid the household bills. The house was and still is completely paid for, but there were property taxes, which were about $1,200 a year. However, there were paid taxes because my father who was living in it previously did not pay any property tax while he was there, so the amount was at least doubled. I did begin to pay for my food. I’m not sure at what point I began to do this. I needed quicker meals and to start eating better than what was usually carried in the house.

It was difficult working so much, but I could handle it. Not everyone can, but I could have very well gotten through those two years without working both of those part-time jobs. I could have only done one, like the student government job which only required a few hours a week. I didn’t have to have a car and pay for my gas because the school bought everyone bus passes where they could go anywhere in town during bus hours. (That was one of the things that student government did for the students, actually. Isn’t that great? See, our tax dollars don’t always go to waste.) I felt that having my own car was necessary for safety and it really was a lifesaver for the crazy amount of stuff that I was doing.

The only thing that I regret in life is not starting college at the age of 16. It’s my biggest regret.

I want to add to my last comment that the Pell Grant covered all tuition and fees, textbooks, and because I did not buy my books from the most expensive place (the on-campus bookstore) I ended up pocketing some of the money. I had tried to get a job off campus before enrolling into college, but I had no luck. The town was very hard to find work in. None of my friends could find work until they had moved out of town. Yes, it is that bad.

Coffee bars are currently a trend and big hit, if I do say so myself, in home decorating. I myself am participating in this trend and it’s proven to be a success! Not only is the bar appealing to the eye, but my husband now makes himself a cup of coffee every morning before he goes to work instead of leaving early to buy a coffee from a drive-thru. Win-win! We were gifted the Keurig as a wedding present, so it has cost us very little to set up. I did purchase a cart for the coffee and tea items to be set on, which was about $50. In the future we may upgrade to espresso machines or maybe just add them to the table alongside the Keurig. My husband grew up with his mother making really strong coffee and considers most coffee from a regular coffeemaker to be dishwater. His mom boils the coffee grounds for a little while and makes the coffee look black when you pour it, instead of brown (dishwater).

I don’t see any mention of the pour over method so I’ll post my costs using my Chemex. I gave my Keurig away this past December and purchased the Chemex 8-cup at my local coffee shop. The Mrs. and I used to buy starbucks K-Cups at Costco and are amazed at how much we’re saving these days. Each month we purchase an average of (3) 1-lb bags of our favorite beans at a local shop (Naked) for $8 each. Taking into account the cost of the Chemex assuming a life of 5 years, Chemex filters (100 ct box, 1 per day) and 3 lbs of coffee, we are happily spending $0.99 per day for 32-oz of amazing mind fuel.

Half of the debt we’re dealing with now is from school loans, so this is a crucial message. I went to Montana State – Bozeman as an out-of-state student. My smart out-of-state friends went through the hoops of gaining residency and also took part-time jobs during school and full-time jobs during the summer. If I had the chance for a do-over, I’d probably still go to Bozeman, but I’d be attending as a Montana resident.

The trick for getting a cheap university education all the way up to PhD:
Get a bachelor’s in Europe (except England but the rest of the UK is fine) at (virtually) zero tuition.
Get a research master’s in North America with funding. Getting funding for your living expenses is super easy. Your supervisor usually helps you with that.
Get a PhD with salary in Europe.

Of course you might wanna stop anywhere along the way. Not everybody needs a PhD.

Was on driving on the turn pike with my mom and brother today returning from a trip to NYC. Just started reading your posts a few days ago. We stopped at a rest area with a food court and mom and brother proceeded to spend $ on Auntie Anne’s, Starbucks, etc.

Proud to say I resisted the urge to buy coffee and instead filled up my bottle with plain old water. Made some coffee when we got home a few hours later.

It is NOT MUCH. But it is a start. A slow start to the change in mindset and habits that I am realizing is the only way to be free.

What ways to do you treat yourself on the road and elsewhere instead of buying cinnamon sugar pretzels and pumpkin spice lattes?

While paying for four years at any school can be outrageous, I suggest doing what my parents did. My sister and I were allowed to apply and decide to go anywhere we’d like, with the understanding that my parents would pay only the first year’s expenses. We lived in a city with only an expensive private school (my sister-in-law went there while living at home, and still managed to rack up over $100K in debt) so my sister and I both left home for school. Knowing you will have to pay for the remaining years seriously affects the decision, but with parents paying the first year, you have a cushion and can adjust to the new school and town without having to get a job right away. I didn’t qualify for need-based aid, and I was accepted into some prestigious universities that didn’t offer any merit based aid, but chose to go to an in-state school that offered me a scholarship. By bringing credits from high school, maintaining the scholarship, and graduating a year early, I was able to graduate without any debt. For our family, this set up provided the perfect transition year from high school to being an adult. Since I had a dorm and meal plan the first year, I didn’t have to worry about rent or groceries and could concentrate on classes and developing good study habits. That became invaluable in the following years, when I did have to work to afford rent and utilities and groceries.

I’m thankful my parents were able to afford to help, but happy they didn’t pay for the whole thing. A lot of my peers were fully funded by their parents, and they were incredibly wasteful, often partying so much they flunked classes and had to retake them, or never learning how to budget for groceries or decrease their electricity consumption.

Coffee is also one of those great Christmas gifts, if you know someone that loves to drink it. I got several bags for Christmas, 2017, and still working off of it here in April, 2018. Total cost for coffee for 2018 so far: $0!

“he can accomplish this with only 528 hours of paid work (3 months at 15 bucks an hour) per year”

Not quite true. Taxes. Is this $15/hr before or after tax? Because if before, he’ll have to work 704 hours in order to handle the 30% taxes he’ll have to pay, which will then bring him down to the $7900’ish range. If the $15/hr is AFTER tax, then he’d be making more per hour pre-tax than $15/hr.

Good news! The new standard deduction is $12,000. That will reduce his federal taxable income to $0 which results in a federal income tax liability of $0. He might want to factor in FICA and state taxes but the rate will be no where near 30%.

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